Opinion: The reasons Americans give for buying bitcoin show they have no idea what they’re doing

                               Worried about the gigantic bitcoin mania? You should be.

As the speculative online “currency” surged again Thursday to a fresh record above $7,800, valuing all the bitcoins in the world at an eye-watering $130 billion, a new survey revealed that most of the ordinary Americans playing the high-risk game have absolutely no idea what they are doing.

Three-quarters of bitcoin BTCUSD, -0.05% holders could not identify a sound financial reason for investing, two-thirds said they hadn’t locked in a nickel of profits even as the price of the token rocketed skyward, and more than half said they didn’t worry about the technology security of their bitcoins — even though hundreds of millions of dollars of the tokens have already been stolen by online hackers.

These were the findings of a survey of 564 bitcoin speculators or investors conducted Nov. 9-13 by polling company Pollfish on behalf of LendEDU, a financial website.

The average bitcoin speculator held $2,930 worth of the “digital currency” at the time of the poll. The price gains since then has lifted the value to $3,500, assuming they hadn’t bought or sold.

                                           Asked why they were betting on bitcoin, 41% told pollsters that they believed the digital currency was “a world-changing technology,” 21% said it was “a long-term store of value, like gold or silver,” and 15% said they were taking the advice of a friend or family member.

None of those are financial reasons for making an investment. Even if the technology behind bitcoin is “world-changing,” that doesn’t imply any investment valuation or rationale. Bitcoin holds no patent over the technology. And if you believe bitcoin might one day become a “long-term store of value, like gold or silver,” it is nothing short of preposterous to claim it as such at this stage. It has only existed for a few years, and it is one of the most volatile financial assets in the world.

Read: Square is now letting people buy bitcoin on their phones

Bitcoin has risen nearly 700% in price since March, from less than $1,000 back then. But two-thirds of those surveyed, 67%, said they had taken no steps to lock in any of their profits by selling some of their tokens. And just one in six said they viewed bitcoin as a short-term trade and planned to sell within a year.

Most of those polled said they planned to hold their bitcoins for years.

Read more on the survey: True believers need to see bitcoin near $200,000 before selling it

Cheerleaders for the online currency say bitcoin will reinvent the way we pay for things. Maybe. But just 8% of those polled said they planned to use it for purchases.

The overwhelming majority, in other words, admit they are playing bitcoin as a speculation without fully embracing the risks.

Financial experts will tell you that there is nothing intrinsically wrong with gambling or speculating — so long as you know that’s what you are doing. Speculating, especially in a bubble, has a lot of merit. You can make easy money.

Those who have bet big on bitcoin so far have come up big winners. But that was true, too, of those who gambled in dot-coms in the late 1990s and real estate in the middle of last decade. It was fun while it lasted, and you made a lot of money so long as you walked away in time.

Misery came to those who thought their speculations were investments, and hung on after the music stopped.